ITT Tech blames the Feds for the closure, which is partly true. Last week the U.S. Department of Education said the colleges could no longer enroll new students who needed federal financial aid to attend, which pretty much meant no new students. However, the company's shoddy tactics and performance were the reasons the Department of Ed cut off the funds.
ITT Tech follows the Corinthian Colleges closure in 2015 for similar reasons. And the Phoenix-based Apollo Education Group, which is the parent company for the University of Phoenix, has fallen on hard times because of increased government scrutiny. The last time I wrote about Apollo a year or so ago, the company's stock had plummeted from its 2012 high of 56.64 to 12.45. The stock is currently trading at 8.91.
The future doesn't look bright for the very profitable for-profit schools which prey on their students who often end up with poor educations and high student loans. That's good for the students and could be a boon for community colleges, which often compete for the same students, charge lower tuition and give the students a higher quality education.
The Department of Education is working to help students who are currently enrolled, including possibly forgiving their student loans.
[U.S. Education Secretary John B. King Jr.] said Tuesday that his agency did not take its action lightly and that federal officials were committed to helping ITT’s students.
“The school’s decisions have put its students and millions of dollars in taxpayer-funded federal student aid at risk,” King said in a blog post.
“We made a difficult choice to pursue additional oversight in order to protect you, other students and taxpayers from potentially worse educational and financial damage in the future if ITT was allowed to continue operating without increased oversight and assurances to better serve students,” he said.
King said current or recently enrolled students could be eligible to have their student loan debt forgiven and might be able to transfer ITT credits to another school.
The Education Department on Tuesday sent an email to ITT’s 35,000 enrolled students to alert them of the closure and options available to them, said Ted Mitchell, the undersecretary of education.
The department has a team of employees ready to answer telephone questions at 800-4FEDAID, has a special website for ITT students and is planning a series of webinars to help them figure out their options, he said.
“We think that it is important for students to continue what they started,” Mitchell told reporters on a conference call. “There’s nothing more important than a college degree in today’s economy.”
Students who were enrolled or had withdrawn from ITT within the past 120 days have two options, Mitchell said.
They could apply to have their federal student loans forgiven. Information is available at the department’s ITT website of by calling the loan servicer.
Students also could try to transfer their ITT credits to another school. But if those credits are transferred to the same program of studies at another school, the loans for the ITT credits would not be eligible to be forgiven, Mitchell said.